Hex Joins AI Companies Leasing Up San Francisco

Another week, another artificial intelligence company lease in downtown San Francisco.

AI software firm Hex Technologies more than doubled its San Francisco office footprint with a 20,000-square-foot lease at 100 Montgomery Street in the Financial District, the San Francisco Business Times reported.

Hex relocated to the 429,095-square-foot, 25-story building from its 8,500-square-foot offices at 330 Jackson Street in Jackson Square. The firm moved into those offices in October of 2023. For Hex, the move to 100 Montgomery is a vote of confidence in the downtown core’s ongoing comeback as well as the city’s real estate-friendly measures.

“With the recent progress in public safety, and promising zoning and regulation reform, we have growing confidence that San Francisco can be a safe and affordable place for our team to live, and us to do business,” Hex CEO Barry McCardel said in a statement, according to the Business Times.

The growth in San Francisco comes on the heels of another Hex expansion on the other side of the country. In January, Hex signed a 12,000-square-foot lease at 250 Park Avenue in Manhattan. At 100 Montgomery, the company entered a notice of nonresponsibility, which office users typically sign before making tenant improvements in their spaces, according to the Business Times.

Vanbarton Group and an unnamed pension fund partner purchased 100 Montgomery in 2016 for $285 million, or roughly $664 per square foot. Home sales platform Opendoor moved its San Francisco offices into the building there in 2024 in a significant downsizing; that 20,000-square-foot sublease is slated to expire in May.

AI firms both big and small have been driving office leasing in San Francisco and across the Bay Area. Giants like OpenAI and Anthropic have been growing their presences in the city, including Anthropic’s addition of an entire 420,000-square-foot building last month at 300 Howard Street. Earlier this week, Reflection AI joined the wave by leasing two floors at 140 New Montgomery Street in South of Market totaling 25,000 square feet.

Last year, San Francisco registered a 107 percent year-over-year increase in office demand, up more than 350 percent since OpenAI’s ChatGPT was released to the public in late 2022, a VTS report stated. The Bay Area at large is expected to see an influx of more than 50,000 workers in the AI sector by 2030, according to a recent report from CBRE. AI companies last year leased 2.5 million square feet across the city and occupy 7 million square feet of offices in the city, representing about 12 percent of San Francisco’s total occupied space, per CBRE.— Chris Malone Méndez